Could two portfolio stocks be primed for even greater gains? Recent developments suggest that Goldman Sachs and Broadcom may have more to offer investors. Here's a breakdown of why analysts are optimistic about these companies' prospects.
Goldman Sachs is capitalizing on a resurgence in deal-making. Coterra Energy named Goldman Sachs as a financial advisor for its $58 billion all-stock merger with Devon Energy. This deal marks the largest in the energy sector since Diamondback's $26 billion acquisition of Endeavor Energy Resources in 2024.
Goldman's involvement in the Coterra-Devon merger is a significant win for its investment banking division. This sector accounted for 15% of Goldman's overall revenue last year. CEO David Solomon noted that "M & A transactions often kick off a flywheel of activity across our entire franchise."
The stock has already gained 7.6% year to date, compared to the S&P 500's 1.5% increase. The CNBC Investing Club has a price target of $1,050 on Goldman and rates it a 2, indicating they'd be buyers on a pullback.
Mizuho suggests investors should consider buying Broadcom after its recent pullback. They cite an acceleration in earnings potential due to multiple custom chip business opportunities.
Mizuho analysts highlighted Meta Platforms as a potential $10 billion to $15 billion customer of Broadcom. Broadcom is also benefiting from assisting Alphabet's Google in building its tensor processing units (TPUs). Mizuho predicts the average selling price for some of these TPUs could jump by 50% in the next few years.
Mizuho reiterated its buy-equivalent rating on Broadcom with a $480-per-share price target, implying 44% upside from current levels. However, the CNBC Investing Club maintains a hold-equivalent rating and a $425 price target, preferring to wait for a further pullback.
Consider that Goldman Sachs' investment banking business, bolstered by M&A deals like the $58 billion Coterra-Devon merger, contributed 15% of its overall revenue last year.
If you're looking at Broadcom, analysts at Mizuho see a potential 44% upside from current prices, with a price target of $480 per share.
The CNBC Investing Club is taking a cautious approach to Broadcom, maintaining a hold-equivalent rating and waiting for a further pullback despite positive catalysts.
Remember that the CNBC Investing Club has a price target of $1,050 on Goldman Sachs, suggesting potential upside if you are comfortable with their analysis.
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